2006 (4) TMI 290 - AT - Central Excise

Summary

Issues:
Imposition of penalty on the Managing Director of a company under Rule 209A of Central Excise Rules, 1944 without filing a separate appeal by the Managing Director.

Detailed Analysis:

1. The Stay Application challenged the penalty of Rs. 1,00,000 imposed on the appellant, who is the Managing Director of a company, for violation of Central Excise Rules by clearing goods clandestinely. The adjudicating authority confirmed the demand and imposed the penalty on both the company and the Managing Director under Rule 209A of Central Excise Rules, 1944. The company appealed to the Commissioner (Appeals) but the Managing Director did not file a separate appeal.

2. The Commissioner (Appeals) held that the company, being a juristic person, cannot represent the Managing Director in personal capacity for the penalty imposed under Rule 209A. The Commissioner correctly interpreted the law, stating that a Private Limited Company is an independent entity, and the Managing Director should be considered as an individual separate from the company.

3. Section 35(1) allows appeals to be filed by any person aggrieved by a decision under the Central Excise Act, 1944. The Managing Director, being aggrieved by the adjudicating authority's order, did not file an appeal to the first appellate authority. Consequently, the appellate authority dismissed the Managing Director's contentions during the company's appeal, noting the absence of a separate appeal by the Managing Director.

4. As the Managing Director did not file an appeal to the appellate authority and the appellate authority did not address the Managing Director's contentions raised during the company's appeal, the current appeal before the tribunal was deemed not maintainable and was dismissed. The Stay Application was also dismissed, leading to the affirmation of the penalty imposed on the Managing Director.

In conclusion, the judgment clarified the necessity for the Managing Director to file a separate appeal if aggrieved by a penalty imposed under Rule 209A, emphasizing the distinction between a company and its individual directors in legal proceedings.